McLane High School students watched and worried in February as County Bank failed and -- in a deal brokered by the federal government -- was taken over by Westamerica Bank.
Most high-schoolers probably could not have cared less about yet another symptom of the nation's banking meltdown.
But McLane students had a vested interest: Ten worked at a County Bank branch at the central Fresno school -- the state's only student-run bank, and one of only a few in the country.
The dust eventually settled a few months later when Westamerica committed to keeping the McLane branch open, although the San Rafael-based bank closed other County Bank branches and people lost jobs.
In less than two years, McLane students had opened a bank, saw it fail and be rescued by a new owner. They worried about losing the business, jobs and promised pay -- scholarships they expected to get at the end of the school year in exchange for working. They also wondered what would happen to the nearly 100 accounts they had opened for students and staff.
Bank President Chris Rodea, right, and Jaclyn Hawkins are two of the 10 McLane High School seniors who run the Westamerica Bank on campus.
It was a real-world lesson for these student bankers, who said they learned more about the economy and business world than they ever could from a textbook.
Chris Rodea, the 17-year-old president of McLane's bank, isn't exactly sure specifically what led to County Bank's failure, but he boiled it down to this: "They gave money to people who were unreliable and who couldn't pay it back. They were too loose with their dollars."
Norma Galaviz, 17, said students now realize they have to be careful with their money, learn to save and limit credit use. She said they also learned that jobs are not forever, especially in today's shaky economy.
"You think you dedicate your life to a job, and it could be taken away -- that's why you save," she said.
The McLane Highlander branch of Merced-based County Bank opened in September 2007 in partnership with the bank, the Federal Deposit Insurance Corp., Fresno Unified School District and the school.
Students have to be seniors to work at the bank; it's a new group of 10 each year. To be considered, they fill out job applications as juniors and submit a résumé and teacher recommendations. About half those who apply are selected.
Student workers each receive a $500 scholarship for two weeks of summer training with the bank and another $1,000 scholarship at the end of the school year. They are overseen by a staff adviser -- usually a McLane business teacher -- and staff from the bank's Fresno branch.
But when Westamerica took over, the future of the school's bank was clouded.
Sharon Schafer, the McLane business teacher who helped launch the school bank and oversaw student workers until she retired at the end of the last school year, said it was an uncertain time.
Students were aware the bank was having trouble even before it failed because the stock was declining and news about County Bank's troubles was in the newspaper, she said.
"We were having difficulty opening new accounts," she said. Even requiring only a paltry $5 minimum deposit didn't persuade students to open accounts after their parents raised concerns about the bank's financial stability.
When County Bank scaled back its involvement at the school, bank staff made fewer visits to McLane. Schafer said she was worried, but a local FDIC representative kept assuring her the money was safe, which the students relayed to their customers. The FDIC also said that if new owner West-america didn't continue the McLane bank, another bank would step in.
And then, a few months after the takeover was announced, Westamerica committed to keeping the branch open.
Robert Thorson, senior vice president and chief financial officer for West-america, said bank officials never thought about closing the school site, although it did shut some of County Bank's larger branches.
Even though McLane's bank is a small operation, "it's good for the community, good for the kids," he said. "You don't look at something like this like a traditional bank ... it's special."
Brad Berrett, a McLane business teacher and this year's adviser to the student bank, said that although the bank has a new name and the logo on the building has been replaced, it's been business as usual for the student workers.
The bank is in the same location, in the former teacher's lounge. Students still work their regular shifts, including during lunch, in teams of two. Dark blue polo shirts with the Westamerica logo have replaced County Bank shirts.
Schafer said things may have settled down, but the takeover had a tremendous effect on students.
"I think they have learned that what happens in the world and the economy can affect them, no matter where they are," she said.
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